Two former employees of the Last Place on Earth told jurors Thursday that they knew the products sold as incense and bath salts at the downtown Duluth head shop were commonly ingested as drugs.

Former employee Cory Anderson, who worked as a clerk at the store until he was fired in December 2010, testified that owner Jim Carlson came to him late in 2009 with a new product and asked him to test it. Anderson described it as a green, leafy substance and said he put it in a pipe and smoked it in Carlson’s office in the back of the store.

“He gave me some to try to see if I liked it,” Anderson said. “I told him I didn’t like the taste and that it gave me a headache.”

Despite Anderson’s assessment, it wasn’t long before Carlson began selling similar products, which he refers to as “incense” and “bath salts,” but the federal government calls synthetic drugs.

Carlson, 56, is charged in U.S. District Court in Minneapolis with 55 counts for allegedly distributing controlled substances and violating federal labeling laws. His son, Joseph Gellerman, 35, and girlfriend, Lava Haugen, 32, both former shop employees, are charged with four counts apiece.

The government called the former employees to ask them about their experiences with the products. Anderson said he knew that incense products were commonly smoked like cigarettes and not just burned like incense. He also told the jury he bought incense for his girlfriend and he knew she was smoking it.

But prosecutor Nate Petterson expressed frustration with some of Anderson’s answers, saying they varied from what he told the U.S. Attorney’s Office in a recent interview.

When Petterson asked Anderson about his knowledge of how people used the products, the answer appeared to agitate the prosecutor.

“What people did outside of the store is their deal,” Anderson said. “If they buy incense, I assume they’ll use it as incense. If they buy the rolling paper we sold, I assume they will use it for tobacco. And if they use it for rolling a joint, it’s not my problem.”

“Is there any reason you’re answering questions so differently than you did a few days ago?” Petterson asked him. “Have you had any meeting with Mr. Carlson or anyone recently?”

During cross examination by the defense, Anderson said he had not talked to Carlson, Haugen or Gellerman since he was fired, and said he had never talked to any of the defense attorneys. But he said he was frustrated by prosecutors arriving unannounced at his home and serving him a subpoena at work.

“It was not professional,” he said. “It was embarrassing.”

Anderson was fired when Carlson accused him of stealing from the store. He exercised his Fifth Amendment right to not testify about any illegal activity on his part Thursday.

Later in the day, prosecutors also called former employee Sherry Anderson, who described her duties as those of an assistant manager. She is not related to Cory Anderson.

Sherry Anderson testified that on several occasions she saw Carlson ask other employees to test what he called “legal alternatives.” She said she saw him ask Gellerman and fellow clerk Jamie Anderson, who is Cory Anderson’s brother, to assess potential new products.

She testified that she saw Jamie Anderson smoke one in the store after closing one night, but said she never saw Gellerman smoking any. Later, they would give feedback to Carlson about the taste and strength, she said.

However, none of the products that Carlson asked his employees to test were ever sold at the store, she said.

Anderson said that she also believed that Haugen was smoking incense to deal with health issues. She said Haugen mentioned it, but said she never actually saw her ingesting it.

Under question from defense attorneys, Anderson said she regularly heard Carlson talk about changing chemical compounds to keep the store’s inventory legal. She said she believed at all times that the products were legal.

“That’s why you can so openly testify here today, because you didn’t believe you did anything wrong?” attorney John Markham, who represents Haugen, asked her.

“Correct,” Anderson replied.

Prosecutors say the store sold controlled substance analogues — drugs similar to those listed on the federal list of controlled substances. Defense attorneys say the store’s products always complied with federal law, and argue that the defendants never advised customers to ingest the products, which were labeled “not for human consumption.”

Additionally, former employees testified that they never sold a product if the customer made mention of using it for an illegal activity.

Friday is set aside as a day for lawyers to argue motions related to the case. The jury will return Monday for more witness testimony.

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